Key updates to Federal Student Aid
Learn about expected changes to federal student aid programs with the passage of OBBBA.
Key updates to Federal Student Aid
On July 4, 2025 the One Big Beautiful Bill Act (OBBBA) was signed into law significantly reforming Federal Student Aid. Institutions are awaiting official guidance from the Department of Education; however, below is a summary of how key changes in law may impact students at Rio Salado College beginning with the 2026-2027 academic year.
Notice: This Information reflects the most current guidance from the U.S. Department of Education. This information may change as federal rules and guidelines are established.
Frequently Asked Questions
Beginning with the 2026-2027 award year:
Students with a Student Aid Index (SAI) equal to or greater than twice the maximum Federal Pell Grant award amount ($7,395) for the award year will be ineligible for Pell Grant even if the minimum Pell criteria is met.
Example:
- The max Pell amount for 2026–27 is $7,395, if a student has an SAI index of 14,790 or greater, the student will not be eligible for a Federal Pell Grant.
Students who receive non-federal grants or scholarships (such as state, institutional, or private aid) that are equal to the full Cost of Attendance, will be ineligible for a Federal Pell Grant. The foreign earned income exclusion amount reported on the FAFSA will be added to the adjusted gross income when determining Federal Pell Grant eligibility.
Beginning with the 2026-2027 award year:
OBBBA reduces the amount of a loan a student may borrow for an academic year if the student is enrolled less than full-time (24 credit hours) during the academic year. Students enrolled less than full-time must have their Subsidized and Unsubsidized loans reduced proportionally to the level of enrollment.
New Limits for Parent PLUS Loans: New borrowers will have an annual limit of $20,000 and an aggregate limit of $65,000. Once the $65,000 lifetime limit is reached it applies regardless of whether previous loans have been: paid in full, forgiven, or discharged.
- Parents who borrowed a PLUS Loan in 2025-2026 or before can continue to borrow under current limits for 3 years (if the student remains continuously enrolled) or until their student graduates, whichever comes first.
Student Loan Repayment Options: Repayment options will be streamlined into two plans: a new tiered standard repayment plan and a new income-driven repayment plan called the Repayment Assistance Plan (RAP).
RSCC recommends that borrowers contact their loan servicer or review information available from the Department of Education concerning Federal Loan Repayment Options.
Students must be enrolled in a minimum of 6 semester credit hours to be eligible for loan funds. Full-time status is defined as 12 or more semester credits per term. Students enrolled less than full-time would only be eligible for a portion of the annual loan limit.
- To be eligible for 100% of the annual loan limit of $3500 completion of 24 credit hours is required in the academic year. This means full-time enrollment and completion of 12 credit hours in the Fall and Spring semester.
- If a student withdraws from a course in any term the loan will be prorated and reduced in the subsequent term.
- Students enrolled in 6 credits for the fall term and projected to enroll in 6 credits for the spring term would be eligible for 50% ($1750) of the annual subsidized loan limit of $3500 as a first-time, first-year student.
Note: Students can request additional unsubsidized loans, which are also subject to the new annual loan proration rules.
For official updates, visit One Big Beautiful Bill Act Updates.
